State rejects Atlantic City fiscal plan, could seek takeover
The New Jersey Department of Community Affairs has rejected a financial turnaround plan by Atlantic City.
The decision sets the stage for a threatened takeover of the struggling city's assets and decision-making power.
The state rejected a five-year turnaround plan in which the city would lay off 100 additional workers, cut spending and sell its largest tract of vacant land to its water utility, with the money helping pay down the city's $500 million debt.
According to a statement, DCA Commissioner Charles Richman and his team "thoroughly reviewed and analyzed the [Atlantic City's] plan in great detail over the past five days. Based upon the analysis of the plan, the commissioner has concluded that it is not likely to achieve financial stability for Atlantic City."
The state had threatened to take over the seaside gambling resort if it didn't come up with a suitable plan to mend its finances.
Gov. Chris Christie's office says they are reviewing the DCA report, but did not have a statement about the rejection.
Atlantic City Mayor Don Guardian released a statement that said in part, "We are truly disappointed that the state did not recognize the value of this thoughtful and comprehensive plan put together by some of the best financial professionals in the country."
Atlantic City's financial situation has worsened as its casino industry continues to contract.
Five of the city's 12 casinos have gone out of business since 2014.
The Associated Press wire services contributed to this report.